Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.
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South American Wines 32 Beverage Dynamics • July/August 2016 www.beveragedynamics.com a coordinated national initiative to increase wine exports. Chile was already a fresh fruit powerhouse, and classic French grapes had been cultivated since the mid-nineteenth century. However, a small population and low per-capita consumption made exports the only viable path to growth for Chile's wine industry. Government programs encouraged a wave of winery con- solidation and pushed larger companies to take their wines abroad. A thirsty global market responded, and in the last 20 years, Chile's planted vineyard area and production have more than doubled to meet demand. Exports skyrocketed from 27% of total production in 1994 to a staggering 79% in 2014, of which one-third comes to the US. In some years, up to half of Chile's total exports have been in bulk, generating very little profi t, but now a new, concerted effort is underway to raise Chile's profi le as a fi ne wine producer by exporting more premium bottled wines. Doing so is within its means, and will reduce dependence on fi ckle currency markets. Chile's total bulk exports dropped by 21% in 2014, according to the USDA's Foreign Agriculture Service, but total export volume, value and FOB prices per liter of non-bulk wine continue to increase steadily year on year. By contrast, the Argentine Malbec boom that arrived with the new millennium was not planned, but rather the direct result of an economic catastrophe. Though Argentina had long been a larger producer of wine than Chile, higher population and much higher per capita consumption gave vintners few incentives to sell overseas. However, the recession that caused Argentina to default on its national debt in 2001 left wineries with no choice but to sell their exceptional wines abroad at low cost. Just as Argentine wines were peaking, international markets were spooked again recently when Argentina's notoriously vola- tile economy faltered. But 2016 has brought increasing economic stability under a new government, to the relief of Argentina's wine producers. "President Macri's policies are taking Argentina in a new di- rection," says Roberto Luka, founder of Mendoza's Finca So- phenia and a former president of Wines of Argentina. "We are seeing the return of international investors interested in making good wines in the $12 to $20 range and higher. Many of the larger wine groups that have a stake in Argentina's wine trade are reinvesting. They know our premium wines are competitive and can see a sustainable future here." As both Chile and Argentina climb into premium price points for different reasons, bargain hunters can fi nd new South Amer- ican horizons in Brazil and Uruguay. Brazilian exports to date